August 6, 2014

Fire in Cosan's Sugar Warehouse at Santos Causes Minor Disruption

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Firefighters responded to a fire on Monday at one of Cosan's sugar warehouses at the Port of Santos in southeastern Brazil. Cosan confirms that Warehouse #10 of their Rumo Division was engulfed in the fire and that there was minor damage to the adjacent Warehouse #5. The cause of the fire has not been identified.

Warehouse #10 had 15,000 tons of sugar at the time of the fire and there was 18,000 tons of sugar in the adjacent warehouse, but Cosan indicated that their terminal operations continued normally outside of the one impacted warehouse.

Cosan maintains a total of 11 warehouses at the Port of Santos and two sugar terminals, number 16 and number 19, with a total of five shiploaders. Cosan is the major sugar producer in Brazil and Brazil is the world's largest sugar exporter.

Sugar futures in New York jumped at news of the fire but retreated when the full extent of the damage was known. Damage from this fire was significantly less than from the fire last year at the Copersucar Terminal at the same port that resulted in many warehouses being completely destroyed.

The Copersucar terminal is still being repaired and the company has managed to regain only half of its 10 million ton export capacity as of the end of June. Full capacity is not expected to be reached until all the repairs are completed in February of 2015. In the meantime, some of Copersucar's exports have been routed to other facilities at the Port of Santos as well as to other Brazilian ports.